How to choose commercial mortgage brokers
Commercial mortgages are very similar to regular mortgages, except that instead of a home, the property and building that is being purchased will be used for a business. The parties applying for the commercial mortgage are typically business entities rather than individuals.
Applying for a commercial mortgage requires additional steps beyond a credit check—the business' finances and viability will need to be assessed as well. There is also the issue of determining whether the mortgage will be nonrecourse, which basically means that only the building can be seized if the mortgage is defaulted, and none of the other business assets. Because of these complex issues, most companies choose to work with mortgage brokers when seeking a commercial mortgage.
Mortgage Broker Services
Commercial mortgage brokers can help businesses fund the development of a number of types of facilities, including (but not limited to):
- Office buildings
- Institutional properties
- Apartment buildings
Because the business world is often time-sensitive and property acquisitions need to be closed very quickly, brokers can help speed up the process of applying for and receiving a commercial mortgage. They work quickly to assess the company's finances and its ability to procure a mortgage, and can use their connections to shop for the best mortgage rates and options for a business' particular needs.
Finding Commercial Mortgage Brokers
When looking for commercial mortgage brokers, you have two paths to choose from: independent mortgage brokers or mortgage broker firms. Both have their advantages—an independent broker may give you a more hands-on, personal client care experience, while a mortgage firm may have greater connections and expert knowledge to offer.
Whichever route you choose, it's important to make sure your broker has a mortgage broker's license. Along with mortgage broker's licensing, you'll want to check to see if your broker is affiliated with any trusted mortgage brokers associations.
When you're ready to look for a commercial mortgage broker, remember that reputation is key. Research online for mortgage brokers, then be sure to conduct a series of sit-down meetings where you can ask for references and get a detailed description of how each broker conducts their business.